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Housing Loan

NUBL uses a very specific targeting strategy to ensure that all first-time clients are very poor. As one of the targeting criteria is the absence of cement walls or ceiling in the client's house, there is a strong demand for various types of housing loans. To access the housing loans the clients must have maintained strong credit discipline in the previous years, have improved economic condition from previous loans, and be willing to contribute at least 20 percent equity (10 percent cash and 10 percent in-kind). NUBL charges a interest rate of 15 to 18 percent on a declining balance with fortnightly/monthly repayments.

• House Construction Loan: available to clients who meet the above requirements and have taken general loan. Members generally construct a new house on their current property with this loan.
  
  
• House Repair Loan: available to clients who meet the above requirements and have completed the first loan cycle of the general loan. This loan is used to make capital improvements like replacing a roof on a current house.
  
  
• Homestead Purchase Loan: available to clients who meet the above requirements and have borrowed general loan. This loan allows members to purchase a small amount of land.
  
  

The loan size, loan term and other conditions for housing loans are as follows:

Loan Type	Maximum Loan Size Rs.	Loan Term	AnnualInterest Rate	Repayment Frequency
House construction	1,50,000	2-6 Years	15% declining	Fortnightly/Monthly
House repair	20,000	2 Years	18% declining	Fortnightly/Monthly
Homestead purchase	1,00,000	2 Years	15% declining	Fortnightly/Monthly